State + Local Taxes

Northwest Indiana is frequently recognized as having one of the most business-friendly tax climates in the country. Our state currently ranks eighth in best tax environments in the United States and the best in the Midwest, based on the 2016 State Tax Environment Index by the Tax Foundation. This business-friendly tax climate creates a thriving community for innovative businesses and growth.

State Taxes

In Indiana we take creating an environment that’s good for business seriously. Due to legislation in 2011, Indiana’s corporate income tax rate fell by 2 percent. This was the continuation of a scheduled multiyear reduction, which will ultimately see the corporate income tax rate reduced to 4.9 percent by 2022, which would make Indiana’s the second-lowest corporate tax rate of any state levying the tax.

* The law was enacted in 2011, with a plan to gradually reduce from 8.5 to 6.5 percent. In 2014, a new tax law was passed with further cuts. The plan is to get corporate income tax to 4.9 percent by 2022. † In manufacturing, the following are exempt from the sales tax: raw materials, equipment, power, electricity, and utilities. Wholesale sales, items used directly in production, and sales made in interstate commerce are exempt. In addition, the purchase of research-and-development equipment is exempt from the tax. Exemption procedures may apply.

Local Taxes

Property taxes in Northwest Indiana vary by township and range from .93 percent to 7.89 percent. Pursuant to state law, property taxes are capped at 1 percent of assessed value for homesteads, 2 percent for other residential and agricultural properties, and 3 percent for business property. Property tax rates on real and personal property are frequently abated for up to 10 years to support economic development projects.